… is from page 47 of Bruce Caldwell’s brilliant Introduction to the 1997 collection of some of F.A. Hayek’s essays and papers (Bruce Caldwell, ed.), Socialism and War:
Totalitarians rarely go gently into the night.
Wall Street Journal columnist Holman Jenkins asks “What did we learn from China’s Covid experiment?” Two slices:
China will lowball its Covid deaths now but it won’t recapitulate our seminal folly. This was the constant dunning of the public with a “confirmed cases” measure that grossly under-represented how quickly the virus was spreading. The consequences were not just the absurd pouring of resources into hopeless contact-tracing efforts. The media enjoyed insinuating that the virus was stoppable but for the criminal incompetence of our leaders in the face of a disease that killed 2%, 3%, 4% of those infected (when accurate data would have shown the death rate closer to the flu’s 0.1%).
The public was consistently bamboozled to believe, as a University of Southern California survey showed, the virus both harder to catch and deadlier than it was.
…..
The Washington Post last week quoted the incomparable wisdom of a young Chinese businesswoman: “It is impossible to lock everyone up at home and lock them up forever, right? What should come will come…. You have to take this path, and everyone has to take this step, so that China can get on with normal work and life.”
Words like these would have helped the American people make better informed, more rational decisions, especially when waiting for a vaccine to arrive, about how to get themselves and their loved ones through a Covid trial that could not be avoided.
Joanna Baron surveys “the aftermath of Canada’s Freedom Convoy.” (HT David Henderson) A slice:
In other words, Trudeau and his team took the deliberately stringent application prescribed by the Emergencies Act and flattened it into a reasonableness standard, claiming the Commissioner grant them deference where the exigencies of “public safety”—in an environment where a single physical threat remained unidentified— justified the creation of new criminal laws, freezing of bank accounts without a warrant and expanded financial surveillance powers.
The legislative history of the Act makes it unambiguous that this was exactly the sort of conduct it sought to prevent. The Act was introduced to replace the War Measures Act, which was widely seen as permitting overreach and civil rights abuses in response to the Front de Libération de Quebec crisis in 1970, and was meant to constrain executive action.
Thorsteinn Siglaugsson is wise. A slice:
We may eventually get out of the Covid panic. But as long as the soil is fertile; as long as we do not question, do not doubt, but blindly believe and obey, the sword of mass panic, and all the damage done by it, still hangs over our heads. We have to rid ourselves of this threat. What is at stake is freedom and democracy.
Kyle Lamb tweets: (HT Jay Bhattacharya)
We knew outdoor transmission was insanely rare very early on. We knew unhealthy people were far more at-risk from the virus early on. We suspected exercise would help.
It’s so maddening how many places closed beaches, parks, gyms, masked youth sports. Such unscientific baloney.
Casey Mulligan tweets: (HT Jay Bhattacharya)
How quaint! Way back in 2008 the ACLU opposed “punitive, police-state tactics, such as forced examinations, vaccination and treatment, and criminal sanctions for those individuals who did not follow the rules.”
Based on the evidence we have now, a permanent child allowance would indeed reduce poverty among those who fall temporarily on hard times. (That is the initial effect, after all, of giving people money.) But among those families with the weakest attachment to stable work and family life, it would be likely to consign them to more entrenched multigenerational poverty by further disconnecting them from those institutions.
Rich Vedder decries “the most selfish generation.” A slice:
In the 21 years from the first full year of the George W. Bush administration (fiscal year 2002) through today, the U.S. government has not balanced its budget once. This is the longest sustained period of deficit financing in American history, leading to a rise in the gross national debt to about 125 percent of total output. This is higher than it was at the end of the war fought by the Greatest Generation. Contrast that to the period 1900–1930. This is the time when the Greatest Generation was born, grew up, and reached early adulthood. The federal government ran budget surpluses in 20 of those 31 years. During the Roaring Twenties, the national debt declined by one-third, as Presidents Warren Harding and especially Calvin Coolidge worked assiduously to reduce the debt burden.
Why is this important? The national debt is a burden on future generations—individuals who over the next several decades will have to pay bondholders who lent money to the federal government. Today’s Most Selfish Generation is imposing an enormous burden on future Americans. As interest rates move from abnormal lows (owing to the Federal Reserve’s manipulation efforts to lower them) to rates more consistent with economic reality and true-time preferences (people wanting things now rather than later), the interest payments on the debt due annually can be expected to soar shortly—I would conservatively estimate by $600 billion annually. This means higher taxes, reduced government spending, and/or the printing of money to pay off the debt (creating huge inflation). Future generations will feel fiscal pain, and, if modern-day fiscal irresponsibility continues, it likely will also mean that the U.S. dollar’s primacy as the world’s leading currency will be imperiled, and, with it, our planetary economic leadership.
[DBx: Question for “national conservatives” (and others) who continue to call for the U.S. government to adopt “industrial policy”: If the U.S. government cannot muster the political courage and responsibility to do a task as basic as balancing its budget, what reason have you to believe that this same government can be trusted to allocate private-sector economic resources wisely? My question is a serious one. I’d love to get an answer to this question from an industrial-policy advocate such as Oren Cass, Julius Krein, Sam Hammond, Brink Lindsey, Michael Brendan Dougherty, or Marco Rubio.]
Mike Munger creatively explains the inevitability, in a growing economy, of creative destruction.
Here’s a letter to the Wall Street Journal:
Editor:
Among your many just criticisms of the new omnibus spending bill is the fact that, being 4,155 pages, this bill is one that “most Members will never read” (“The Ugliest Omnibus Bill Ever,” Dec. 21). The Constitution’s framers are looking down with disgust.
The brilliance of the U.S. Constitution owes much to the framers’ mature recognition that persons holding political power are more prone to act as scoundrels rather than as saints. The limits and checks on the power granted by the Constitution to the national government were thus created to protect citizens from government-officials’ scoundrelly behavior.
But as clear-eyed and realistic as the framers were, they did not imagine members of Congress being so utterly irresponsible and corrupt as to enact statutes the texts of which no Member can possibly even read. If the framers had been given a glimpse of a 21st-century Congress, they would surely have included in the Constitution this simple provision, one that would have otherwise seemed to an 18th-century American mind to be ludicrously unnecessary: ‘Congress shall make no law that is impossible for persons of ordinary intelligence to read in full in the time allotted for enactment of said law.’
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
… is from page 237 of Russ Roberts’s superb 2014 book, How Adam Smith Can Change Your Life:
Love locally, trade globally.
DBx: The counsel packed into this quotation is not only wise, it’s also a fine summary of Adam Smith’s two books.
Smith’s 1759 The Theory of Moral Sentiments is very much, although not exclusively, about how to act among people who we know on a face-to-face or small-group – a ‘local’ – basis. Many motivations in such settings regularly prompt us to sacrifice our self-interest in order to promote the interests of others.
Smith’s 1776 An Inquiry Into the Nature and Causes of the Wealth of Nations was largely, although not exclusively, focused on the interactions among large numbers of strangers. The same moral sentiments that prompt us to nurse a sick child, to make substantial sacrifices to help a friend in distress, or to give generous gifts to neighbors and colleagues operate with far less intensity and regularity in our dealings with strangers. Because the enormous wealth of modern society requires the cooperation of millions, and in some cases today billions, of individuals, coordination of the production actions of these multitudes cannot possibly be guided by the kinds of moral sentiments that govern our behavior among people who we know. Such coordination must instead rely upon abstract rules of justice along with market-determined prices.
…..
Pictured above is Milton Friedman holding and admiring a product the production and distribution-to-consumers of which requires the knowledge and cooperation of hundreds of millions of strangers.
We know now and, indeed, we could have known back in March 2020, that most of these self-limits were overreactions, at least for those under age 60. The data from Italy showed an extreme gradient in death rates from COVID-19. A study of COVID-19 fatalities published on March 23, 2020 (Onder, Rezza, and Brusaferro, 2020), showed no fatalities for people under age 30, only 4 fatalities for people aged 30 to 39, 53 fatalities for people 40 to 59, 139 fatalities for people 60 to 69, 578 fatalities for people 70 to 79, and 850 fatalities for people aged 80 or above. That means that the median age of death from COVID-19 in Italy was above 80. And, of course, getting back to the athletic examples, virtually all the athletes in the three organizations mentioned above were under age 40 and almost all were under age 30.
These overreactions were due to two things: (1) people’s own attitudes to risk and their innumeracy about death rates and (2) the incessant media hyping about the dangers of COVID. Still, the advantage of leaving the decision in people’s own hands and letting them be free to choose was that they could get new information and act on it. Indeed, that’s what people in many areas did when allowed to. In June 2020, for example, California’s government, which had imposed one of the harshest lockdowns, allowed bars to open for a few weeks. And, wonder of wonders, many people, especially young people, who were at little risk, started going to bars again.
… is from page 130 of the 2014 Sixth Edition of (my mentor) Robert Ekelund’s and Robert Hébert’s remarkable history-of-economic-thought textbook, A History of Economic Theory & Method:
The idea of a self-regulating economy operating within a market system was a new one in the mid-eighteenth century. Anticipations of the idea crept into early Continental economic literature before then, but clearly Adam Smith gave the idea its most timely and forceful expression. The perception of a natural social order, existing in the absence of any form of central planning, was one of the most liberating ideas ever to emerge in the history of economic thought.
Brian Riley dissects Robert Lighthizer’s recent New York Times op-ed on U.S. trade with China. Two slices:
In a weekend op-ed for the New York Times calling for strategic decoupling from China, former U.S. Trade Representative (USTR) Robert Lighthizer attempts to rewrite trade history and the laws of economics. However, there is one thing he gets partially right: “The U.S. objective should be to continue trade and economic activity beneficial to us and to discourage any part that is not.”
The question is, who gets to decide whether trade and economic activity is beneficial or not: Hard-working Americans deciding how to spend and invest their money? Or politicians and bureaucrats based on which industries have the most political clout?
…..
More fundamentally, a trade deficit is not a transfer of wealth. When Americans import goods from other countries, those dollars are used either to buy U.S. exports or to invest in our economy. Either way, we benefit.
GMU Econ alum Dominic Pino offers evidence that “China isn’t even good at being China.”
Kate Wand talks with Samuel Gregg.
Glenn Loury explains that “racial preferences won’t solve racial inequality.” A slice:
Racial preferences persist because they represent the path of least resistance. If an administrator of a selective institution saw that blacks were a minuscule percent of his student body, he would want to change that. If he found that admitting African-American students at a lower percentile of performance would ease his public-relations problem, then he would do it. But when thousands of people in that same situation make the same decision and place it beyond criticism, the goal of equality suffers. Failing to address ourselves to the developmental disparities manifest in test scores, as well as failing to change the dynamics of human development at the root of black underrepresentation in elite and selective venues, means failing to solve the inequality problem.
Head counts are no substitute for performance, and everyone knows it. No policy can paper over the racial dimension of academic disparities. True equality would seek to remedy the foundational circumstances reflected in the underrepresentation of African-Americans at the Bronx High School of Science, Brooklyn Tech, Holy Cross, or Harvard. I’m for racial equality, not patronization. Don’t patronize my people, inflict on us the consequences of a soft bigotry of low expectations, or presume that we’re not capable of manifesting excellence in the same way as any other people. Don’t judge blacks by a different standard.
For degrowth proponents, the improvement in global living standards is nothing to celebrate. According to a new article in Nature, degrowth requires developed countries to abandon economic expansion as a goal. It means producing and consuming less, abandoning “less necessary” consumption of fossil fuels, meat and dairy products, cars and air travel, and even “fast fashion.” It means less (or no) private ownership and new ways (read: government control) of “provisioning” individuals to meet their needs.
Once you are duped into believing destruction is productive, almost everything that a rational public policy would label as a cost becomes, by some judo move of seraphic intuition, a benefit. If need is wealth, then it makes sense to outlaw fossil fuels immediately, because of all the jobs created trying desperately to provide basic transport and energy.
The problem is that jobs are not wealth. Wealth is access to the goods, products, and services that make our lives better. It is true that “studies show” that wiping out all our productive wealth based on fossil fuels efficiently would create jobs. Those “studies” are among the best arguments against doing anything of the sort.
Advocates of high taxes say that people don’t relocate because of taxes. It’s true that in surveys that ask people why they moved, migrants list plenty of reasons, including housing costs, economic opportunity, and pursuit of a better overall quality of life. Still, there’s a close correlation between lists of the highest-taxing states and rankings of states that people are leaving. The relationship is so glaring that several years ago Gallup remarked, “Even after controlling for various demographic characteristics including age, gender, race and ethnicity, and education, there is still a strong relationship between total state tax burden and desire to leave one’s current state of residence.”
In a caustic 2011 column, “Leaving Children Behind,” Nobel Prize-winning economist Paul Krugman offered a back-of-the-envelope statistical analysis to extoll Wisconsin’s unionized teachers and excoriate nonunionized teachers in states like Texas. Shortly after, Twitter car-identification guy and acerbic commentator David Burge (a.k.a. @Iowahawkblog) took Krugman’s analysis down to an automobile graveyard and ran it through an Al-Jon Car Crusher (made in Iowa). His takedown was a blogpost titled “Longhorns 17, Badgers 1.”
TANSTAFPFC (There Ain’t No Such Thing As Free Protection From Covid)
Eugyppius is justly critical of New York Times reporting (so called) on covid. A slice:
It’s also interesting how [in the eyes of New York Times ‘reporters’ and opiners] anti-lockdown protestors in the West are thugs and stupid conspiracy-crazed Nazis, while in China they are “students, workers and homeowners.”
“1) Was Fauci involved in U.S. government funding of controversial early research into covid?
2) Did Fauci lie about this to Congress?
The answer to both questions is “yes.””
—
@thackerpd
… is from pages 442-443 of Hayek’s 1976 lecture “Socialism and Science,” as this lecture appears as Chapter 29 of Essays on Liberalism and the Economy (2022), which is volume 18 (expertly edited by Paul Lewis) of The Collected Works of F.A. Hayek:
In a society whose wealth rests upon prompt adaptation to constantly changing circumstances, the individual can be left free to choose the directions of his efforts only if rewards fluctuate with the value of the services he can contribute to the society’s common pool of resources. If his income is politically determined, he loses not merely the incentive but also the possibility of deciding what he ought to do in the general interest. And if he cannot know himself what he must do to make his services valuable to his fellows, he must be commanded to do what is required.
… is from page 253 of Will and Ariel Durant’s 1975 volume, The Age of Napoleon (original emphasis):
Perhaps it was magnificent to try, but it was certain to fail. In the end imagination toppled reason….
DBx: How many government programs can be described in this way? Alas, far too many.
Very many people – including (or, especially?) today those who gaudily exhibit their alleged allegiance to science – treat the state as if it possesses the power to work miracles. Very many people – including (or, especially?) today those who gaudily exhibit their alleged allegiance to science – commit what Matt Ridley identifies as the reverse naturalistic fallacy, which is to conclude that, if something should exist, then that something can indeed, with enough effort and will-power, be conjured into existence.
A true understanding of, and commitment to, science promotes humility. A false understanding of science promotes hubris and dogmatism.
Pasted below is a comment left on my Facebook page (and also at the Wall Street Journal) by my emeritus Nobel-laureate colleague, Vernon Smith:
Here is my comment in the Conversation section of WSJ on the Swain article on Adam Smith: The problem with much of the literature on Adam Smith is that the authors do not read him as carefully as he wrote. For example, reference is made to “people pursuing their own self-interest,” but Smith used the term “own interest” 25 times in Vol. II of WN, the term “self interest” only once in referring to the minor clergy of Rome, who were “kept more alive by the powerful motive of self-interest. The parochial clergy derive, many of them, a very considerable part of their subsistence from the voluntary oblations of the people; a source of revenue which confession gives them many opportunities of improving. The mendicant orders derive their whole subsistence from such oblations. It is with them, as with the hussars and light infantry of some armies; no plunder, no pay.) WN, Vol II, p234-5).
Smith also made plain that commodity value was determined by labor only “In that early and rude state of society which precedes both the accumulation of stock (capital) and the appropriation of land, the proportion between the quantities of labour necessary for acquiring different objects seems to be the only circumstance which can afford any rule for exchanging them for one another.” (WN, Vol. I. p 49)
DBx: Indeed it is true both that Adam Smith wrote with remarkable care, and that many of his readers read with remarkable carelessness.
